Industry News | January 22, 2001

Dispute Leads to Temporary Checkers, Rally's Closures

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Checkers Drive-In Restaurants, Inc. (Nasdaq: CHKR) reported today that one of its franchisees, Great Lakes Restaurant Company I, LLC, filed for bankruptcy on January 18, 2001 and closed 35 Rally's restaurants that the franchisee owned in Detroit and six Checkers restaurants that the franchisee owned in Kansas City.

"It's our current understanding that the bankruptcy and closings are the result of a dispute between Great Lakes Restaurant Company, LLC and its lender," says Daniel Dorsch, president and chief executive officer."We're hopeful matters can be timely resolved so that the restaurants can be immediately re-opened to serve our customers.'' Our franchise department is standing by to offer any assistance needed when we receive word the restaurants are cleared to reopen.

In related matters, 17 Checkers restaurants in Philadelphia which Checkers formerly owned and sold to Great Lakes Restaurant Company II, LLC were reacquired by Checkers. Additionally, 10 Rally's restaurants located in Toledo which Great Lakes Restaurant Company III, LLC were in the process of purchasing while operating were also turned back to Checkers.

Mr. Dorsch indicated that Checkers began operating the restaurants located in Philadelphia and Toledo on January 17, 2001 and that the transition of the day to day operations from Great Lakes to Checkers has been smooth.

Checkers Drive-In Restaurants, Inc. and its franchisees own approximately 433 Checkers operating primarily in the Southeastern United States and approximately 457 Rally's operating primarily in the Midwestern United States.